Wall Street investors are very volatile today. They show no commitment in any direction for more than a few hours at a time. This makes it very difficult to charge capital with great conviction. This dynamic is part of what influenced it Calf (NYSE:TDOC) stock. The TDOC has canceled an entire pandemic relief rally. He is now a falling machete that seems to be going into the abyss.
My argument today will be hard to sell for most readers, but stay with me a little longer. It’s hard to convince people that a stock has value if it can’t attract offers. Therefore, I will support my claims with the data.
Teladoc shares currently represent a convincing long-term investment. But first, it’s important to note that nothing is absolute, so I think that’s the starting point.
With so much uncertainty on Wall Street today, investors should leave room for error.
The TDOC share has a solid foundation
Basically, business is healthy and it’s not just an opinion. Evidence is in the company’s official income statement. Since 2014, the management has achieved an average growth of 70% in revenues and gross profit. This should give them doubts about their skills.
Critics may point to the fact that they are still losing a lot of money, which I disagree with. But obviously this is a stock of growth, so it’s okay to spend too much for now. Amazon (NASDAQ:AMZN) did this for more than a decade before opponents finally understood.
In addition, excellent financial metrics to measure value a growing company is its selling price (P / S). POC S shares of TDOC is 7x, which is lower than Apple (NASDAQ:AAPL), alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) in Facebook (NASDAQ:FB). This is despite the fact that it exceeds their growth rate by miles. As long as management continues to keep pace, valuation will normalize over time.
Often the problem of declining inventory is not at its core. Often, investors ’expectations are the ones that are wrong. This was the case in the TDOC, as the results in 2020 were remarkable. They have increased subscriptions by almost 40%, making them difficult to replace. In fact, 2021 was a complete mess with barely any growth. However, they still have over 50 million subscribers, which is a good basis for this year.
Demand will not be a problem
The concept of tele-health makes a lot of sense on so many levels. Like many of the habits we developed during the crisis, this one is not a fad. The need for more efficient medical solutions is likely to increase with the global trend of digitization.
A more compelling side of the argument for today’s TDOC shares is in its chart. Unusually, it erupted in January 2020, a full month before the pandemic crisis. I would expect conspiracy theorists to be everywhere there. That year, the stock never fell like the rest of the market to its lowest value in March.
In fact, when the indices finally hit bottom in March, TDOC shares rose by 50% compared to January. It is currently much lower than both levels.
In addition, the Teladoc share is now at a level that has a history. The bears overthrew him in October 2018. Then the bulls rocked him in January 2020. As a result, the zone is a hotspot of conflict, twice in the space of 14 months. When stocks fall back into such battle zones, they often find buyers who survive.
It doesn’t have to be a hard line in the sand, but it’s the exact opposite of chasing stocks into runaway rallies. Buying a Taurus at these levels is unlikely to be an obvious mistake. Nevertheless, it would be good for investors to take only partial positions to begin with. The indices are still moving close to the highest values, so we should leave room for surprising corrections.
On the day of the publication of Nicolas Chahine did not hold (directly or indirectly) any positions in the securities referred to in this Article. The opinions expressed in this article are those of the author and are the subject of InvestorPlace.com Guidelines for publication.
Nicolas Chahine is CEO SellSpreads.com.